Labour's decade in power has failed to reverse the surge in inequality under Margaret Thatcher and Gordon Brown's policies to support the less well-off are failing to prevent the gap between rich and poor widening again, official figures showed yesterday.

The snapshot of the impact of taxes and benefits on households showed that the trend for those on the highest incomes to receive the biggest pay rises was outweighing the impact of tax credits, the minimum wage and extra spending on schools, hospitals and welfare benefits.

Data from the Office for National Statistics showed that without the redistributive measures Mr Brown has introduced, the UK would be a far more unequal society. However, the gulf that opened up under Mrs Thatcher remains almost the same as when she left office at the end of 1990.

"Inequality still remains high by historical standards - the large increase which took place in the second half of the 1980s has not been reversed," the ONS said in its annual study.

According to the ONS, the original incomes of the richest fifth of households in the UK was 16 times greater than those in the poorest fifth - £68,700 compared with £4,200. After redistribution through taxes and benefits, however, the ratio between the top and bottom of the income scale was reduced to four-to-one - £49,300 against £13,500.

Mr Brown has used many of his budgets since 1997 to boost the incomes of the less well-off, introducing tax credits to boost the take-home pay of the working poor. But the study by Francis Jones of the ONS showed that Labour has been running to stand still for the past 10 years.

"Inequality of disposable income increased rapidly in the second half of the 1980s, reaching a peak in 1990. After 1990 the trend was downwards, although inequality did not return to the levels seen before the increase of the late 1980s," Mr Jones said.

"After 1995/96 inequality began to rise again reaching a peak in 2001/02 - actually at a level very similar to that seen in 1990.From 2001/02, there was a small reduction in income inequality, although the latest figures for 2005/06 show an increase over the previous year, and the latest evidence suggests that income inequality may be increasing again."

The report said that cash benefits played the biggest part in reducing inequality - with the poorest two fifths of households receiving 59% of the total.

Direct taxes also hurt the rich more than the poor, but indirect taxes have the opposite effect, with VAT and excise duties hitting the poorest groups hardest. Overall, the ONS said, poor families paid a bigger slice of their incomes in tax than rich families.

The shadow chancellor, George Osborne, said: "These figures are a real eye-opener on Brown's Britain. When he launched his leadership bid last week, Gordon Brown said his 'core belief' was in 'a Britain of fairness and opportunity for all'.

"Today we learn that after his 10 years as chancellor, inequality is rising and the poorest fifth pay the highest proportion of their income in taxes. Yet again the gap between reality and Gordon Brown's rhetoric has been exposed. It's the same old Labour, same old spin."

The ONS said that some types of household gained more than others from redistribution. Retired households paid less in tax than they received in benefits and gained overall. Among non-retired households, single-parent families were winners from the tax and benefits system but all other households paid more in tax than they received in benefits.

However, families with children did better than those without children due both to direct payments such as child benefit and benefits in kind such as hospitals and schools. The ONS said that the amount received from benefits in kind fell gradually as incomes increased.